Traders Split On Whether Market Will Rally

"We think the market will continue to bottom over the next one to two quarters," he said.

"If there’s going to be any type of rally at all we think at earliest it will be sometime late this year."

Hefty, who is heavily invested in cash, noted there is "a lot of risk in the system and I equate that to swimming in a pool of sharks. If there’s a few guys in there that want to swim and be rewarded, that’s great. If they get bitten or, worse, eaten alive, I’ll wait. The sharks will go away and there’ll be a safer time to reenter the market."

The technical indicators his firm uses had been bullish until June 6, when they turned over 50 percent bearish. That has only happened twice before — April 2000 and November 2007.

Markets: What the Charts Say

Weighing in on what why technicals can show where the markets are headed, with David Hefty, Hefty Wealth Partners and Mark Newton, Greywolf Execution Partners.

"Even though the last two times the market followed that with an over-50 percent drop, who knows what’s going to happen this time?" Hefty asked.

"Maybe there could be a short-term rally this summer. The markets are very thinly traded. They go up and down at a very rapid pace. They’re moving fast."

In the same interview Mark Newton, chief technical analyst at Greywolf Execution Partners, wasn't as bearish. He thinks in the next four to six weeks, "we can retrace some of these declines."

He said that from a technical standpoint "the market is gradually showing signs of coming out of eight weeks of decline. I think the risk/reward [ratio] does favor positioning on the long side."

July is "typically one of the more bullish months of the third quarter" where the Standard & Poor's 500 and the Dow Jones Industrial Average are concerned, with gains averaging 1 percent, Newton said.

"The bottom line is we haven’t really seen any real signs of technical deterioration in the longer-term trends, so that’s key," Newton said. "We have a short-term correction but the overall longer-term trends are still intact."

He is long on the PowerShares DB US Dollar Index Bullish Fund and the ProShares UltraShort Euro Fund .